This newsletter will solely address activity concerning the legislature’s attempt to address and change the Secretary of the Kansas Department of Health and Environment’s decision to deny Sunflower Electric Power Corporation’s application to build two 700 megawatt super critical coal fired generation plants at their Holcomb Station. The leadership of the House and Senate, the chairmen of the respective committees in the House and the Senate and the ranking minority member in the House have worked at engaging the governor or her staff in conversation that may lead to negotiations about the plants. After about two weeks of attempts to start negotiations it became clear the governor was not prepared to engage in a manner that could lead to compromise.
House energy and utilities chairman Carl Dean Holmes, Liberal, his staff and the revisor of statutes office worked many late hours to create a bill during the third week. That bill, House bill 2711, was introduced Wednesday of last week. An identical bill was introduced in the senate utilities committee.
Since the leadership of the House and the Senate want to see these bills proceed, committee hearings will be heard immediately. Proponents will testify Monday and Tuesday of this week and opponents will testify Thursday and Friday. It is the intent of the committee chairmen to work the bills on Friday. This is probably as fast as a controversial issue can proceed.
There are about seven general areas addressed in the bill.
1. The Remedy. The Kansas Clean Air Act would be amended and authorize the Secretary of Health and Environment to implement the federal Clean Air Act and to prohibit the Secretary, absent specific statutory authority, from adopting rules and regulations under the Kansas act that are more stringent than required by the federal act or rules and regulations promulgated pursuant to the federal act.
The Secretary will be prohibited from denying or delaying issuance of a permit under the Clean Air Act if the requirements of the act have been met by the applicant. The Secretary will also be prohibited from utilizing the emergency powers under K.S.A. 65-3012 in the air quality permitting process.
An applicant whose permit was denied after January 1, 2006 and remains in administrative or judicial review may petition the Secretary to reconsider their application. The Secretary will use the parameters set out in the bill for reconsideration.
2. Emission Limits. The proposed plants will produce about 1,950 pounds of carbon dioxide (CO2) per megawatt hour. The bill sets an initial emission limit of 1,520 pounds per mega watt hour for the first ten years then 1,330 pounds per megawatt hour.
3. CO2 Cap and Mitigation. Certain activities will off set CO2 emissions. The amount of CO2 not off set that exceeds the emission caps will be subject to a tax of $3 per ton of CO2. Some of the off sets that may used are: wind power used by the generation company, CO2 storage projects, projects using algae to displace CO2, new nuclear or hydro-power used by the generation company, ultra-supercritical pulverized coal technology, minimum till and no till farming practices, transmission system improvements that facilitate the use of renewable power, energy conservation research and education and the retirement of generating plants.
With no mitigation, the Sunflower plant could pay $7.9 million per year to the state. The plant’s rate payers would probably pay the carbon tax.
The carbon tax would be paid to the state and used to fund grants for energy efficiency efforts.
4. Conservation. New state buildings and new public school buildings must be designed to meet energy and water efficiency standards. The average fuel economy for state owned vehicles must increase significantly.
5. Merchant Plants. There is a prohibition of new merchant power plants in the state. There are none operating in the state now. A merchant power plant sells power on a wholesale basis and does not supply the power to a customer base with which it is associated. Sunflower’s owners are co-operative organizations that deliver power to businesses and consumers. The proposed Sunflower plant will not be a merchant power plant.
6. Study Commission. The bill creates the Kansas Electric Generation, Transmission and Efficiency Study Commission. The commission will study electric generation and transmission issues and make reports to the 2009 and 2010 legislative sessions.
7. Net Metering. The bill will set up a system that will allow certain solar power generators to sell power back to the generation and distribution system through the solar generator’s electric meter.
The initiatives set out in my paragraphs 4, 5 and 7 were included to satisfy some of the governor’s concerns. It is a little early to tell what type of amendments will be offered in the committee and in the House. I think the present bill could pass the House, but many members are focusing on the issue and deciding what they can or can not support. If the bill passes the House and the Senate, it could be vetoed by the governor. The 60% approval necessary in both chambers to over ride the gubernatorial veto may be difficult to achieve, especially in the House.
You may read House bill 2711 at www.kslegislature.org. Do not hesitate to let me know how you feel at jwhitham@wsbks.com or at the Republican presidential caucus at the Wheatlands Convention Center this Saturday morning. I am interested in your opinions.
If you would prefer not to receive this e-mail newsletter, please let me know at 785 296-7671, or contact me at jwhitham@wsbks.com.
